A Foreclosure by definition is the following:Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower, who has stopped making payments to the lender, by forcing the sale of the asset used as the collateral for the loan.
The US went through the housing market collapse in 2008 which was catastrophic to home owners. In some areas values dropped by more than 50% and entire streets were ripe with foreclosure listings. The majority of the lenders and banks that had these properties for sale were desperate and were willing to take a substantial financial loss to close a sale. The banking system was in terrible shape and provided the perfect environment for investors to take a advantage and get some smoking deals. This was not the case in Canada during that time and this still holds true today.
The Canadian banking system during the world financial crisis was praised for it's tight lending rules and overall strength in the housing market. They were able to weather this storm that the entire world was facing. Banks and lenders were still making money hand over fist and the delinquency rate was extremely low under 1% vs the US which was over 11%. Foreclosure properties were not sold off at massive discount prices, in fact, most were priced over market value. The banks and lenders are financially secure and do not need to sell at a discount. The thought that they were or are, is the biggest myth in Canadian real estate.
The current Canadian mortgage delinquency rate is still under 1% and locally in Alberta under 2% for any property that has a mortgage or loan. Let's keep in mind that 50% of Canadians do not have a mortgage, 25% have less than 50% remaining on their mortgage, and 25% have at least 10% equity in their property. This shows that the overall picture for the housing market is not in trouble.
The way a foreclosure listing should be viewed is simply this. It is a property where the owner has gone into default and the bank or lender has the property for sale. That is it. They are not desperate, they are not willing to take an offer of 20% lower than list price, and they are certainly not going to play by the rules that a public seller has to play by. They will most likely only be willing to accept an unconditional offer, will sell the property in it's current state and not give any warranties, and may even disclose the details of all offers to everyone involved to drive the price up. Does this sound like a good deal and situation for a buyer? No chance!
If you are looking for a deal, your best bet is to find a property that has a motivated seller or is listed at a discount price to sell quickly. This will always come from a regular seller, not a foreclosure listing. To find that deal you need an experienced and professional Realtor who knows what they're doing. I am that Realtor. Let me know how I can help you find that next great deal!
Jablonski Real Estate Group
Author:David Jablonski Phone: 403-975-5915 Dated: September 21st 2016 Views: 166 About David: Active in Calgary real estate since 2007, David has seen every type of market and knows how to help ...
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